CHENNAI: From June 16, you will be paying a different rate every day for petrol and diesel across India.
The development, which comes after pilots were run in five cities, will put the Indian fuel market in line with global practices and help oil companies reduce vulnerability to price and currency volatility. However, while OMCs are set to reap benefits, dealers in most states are demanding an increase in their commission to offset increased costs.
The decision to rollout the system nationwide was taken on Wednesday at a review meeting. The “relative success” of the pilots convinced the review panel, say sources.
The new system is expected to increase transparency, said IOC, adding that it will “also enable smoother flow of products from refinery/depots to retail outlets.”
Dealers however, are concerned by what they say are unaddressed issues in the new system.
According to K P Murali, president, Tamil Nadu Petroleum Dealers’ Association, the move will affect already slim margins with increased costs.
“If prices are revised daily, and are falling, small volume dealers will be badly hit by inventory losses,” says Murali. “Additional manpower will also be required to maintain the new system.”
“In its current form, the new system will be harder on dealers,” says HS Manjappa, president of Karnataka State Federation of Petroleum Dealers. Aside from increases in commissions, dealers also want OMCs to provide LED-lit rate boards that are directly updated.
“Even with high automation, updating prices is a complicated affair,” said Murali, adding that the new rate should be automatically pushed by the OMCs, but many fuel stations lack necessary infrastructure.